Governor David A. Paterson today announced a multi-billion dollar financing plan to stabilize American International Group (AIG), the world’s largest insurance provider, at no cost to New York taxpayers. The plan calls for AIG to transfer some assets to provide necessary cash for short-term liquidity, a move that requires regulatory oversight approval from the New York Insurance Department. AIG will undertake a series of transactions that are expected to raise about $20 billion, solving the company’s immediate cash liquidity problem. Additionally, Governor Paterson has sent Insurance Superintendent Eric Dinallo to work with the Federal Reserve on a plan to help AIG.

“Wall Street’s continuing problems should serve as a stark reminder that this recession is far from over. New York State has taken the first step towards helping to stabilize AIG, which is otherwise a very healthy company,” said Governor Paterson. “On a state level, we were able to reach a market-based solution that will stabilize AIG at no cost to New York taxpayers. Policyholders should also know that they are safe, and their insurance policies are still good. AIG’S insurance companies are financially strong, and the Insurance Department will continue to ensure that they remain strong.”

These transactions will protect the company’s policyholders, which is a pre-condition of the Insurance Department’s approval. Additionally, the Insurance Department will continue to closely monitor AIG to ensure it has the assets to pay claims.

New York State Insurance Department Superintendent Eric Dinallo said: “Under Governor Paterson’s direction, we are working closely with AIG to craft a transaction that will stabilize an important New York insurance company, while protecting policyholders. This continues our work with the bond insurers where the State proactively produced market-based commercial solutions. We will continue to implement the Governor’s program of creative and pragmatic regulation that promotes growth while protecting policy holders and consumers.”

AIG is the world’s largest insurance company with $1 trillion in assets, and more than 100,000 employees. In New York State, AIG has 8,500 employees who earn an annual payroll of $897 million.

(YWN Desk – NYC)